Questions from Federal Taxation

Q: Maya exchanges an office building with a fair market value of $

Maya exchanges an office building with a fair market value of $200,000 and a basis of $110,000 for $20,000 cash and a warehouse with a fair market value of $300,000. In the exchange, she assumes the...

Q: Evelyn's Excavating Service traded an excavator for a new backhoe. The

Evelyn's Excavating Service traded an excavator for a new backhoe. The excavator has a fair market value of $37,000 and an adjusted basis of $24,000. The backhoe is worth $34,000. The owner of the b...

Q: A fire in the factory of Franny's Famous Frankfurters destroys several stuffing

A fire in the factory of Franny's Famous Frankfurters destroys several stuffing machines. The machines have an adjusted basis of $125,000 and a fair market value of $225,000. Franny's insurance comp...

Q: In October 2017, fire completely destroys the principal residence of Olaf

In October 2017, fire completely destroys the principal residence of Olaf, who is 63 and single, and lives in Bemidji, Minnesota. He owned the home for 16 years; his adjusted basis is $58,000. Olaf...

Q: Ken and Helen own a bed and breakfast in Vermont. They

Ken and Helen own a bed and breakfast in Vermont. They acquired the property in 2002 for $190,000, and their adjusted basis in it is $95,000. The property is worth $260,000, and they have a mortgage...

Q: Nan wants to incorporate her sole proprietorship and will transfer cash of

Nan wants to incorporate her sole proprietorship and will transfer cash of $5,000 and property with a fair market value of $60,000 and a basis of $20,000. The corporation will assume the $55,000 mort...

Q: Jacqui and Joanne plan to buy a bed and breakfast inn for

Jacqui and Joanne plan to buy a bed and breakfast inn for $200,000. Jacqui will contribute $20,000 toward the purchase and operate the enterprise. Joanne's primary role is that of investor. She will c...

Q: Discuss the basis of an ownership interest received in exchange for property

Discuss the basis of an ownership interest received in exchange for property and the basis of the property received in exchange for an ownership interest in the hands of the entity.

Q: How do liabilities affect the basis of a partner's interest in a

How do liabilities affect the basis of a partner's interest in a partnership?

Q: Explain the difference between a recourse debt and a nonrecourse debt.

Explain the difference between a recourse debt and a nonrecourse debt.